Infrastructure India (IIP) has announced its annual results for the twelve months ended 31 March 2022. The key takeaways, from what we can see, are that IIP now has a value per share of 0p, or nil, and the accounts have not been prepared on a going concern basis. [QD comment: Unfortunately, this is no great surprise. We have long made the case that IIP’s board and managers have been failing investors. The manager has been allowed to pile on more and more debt onto the fund, to its benefit, and now, through the debt, owns all of the remaining value in the company. Although not unprecedented, it is almost unheard of for a London-listed investment company to have its NAV completely wiped out. If you look at other India-focused funds, these have generally been doing very well as, following a number of years of well-targeted reforms by the Modi government, India is booming and has been one of the few bright spots in the current market malaise. IIP’s tale of woe is in stark contrast to this and I doubt that anyone involved in managing this fund or providing oversight will be winning any awards anytime soon.] IIP’s announcement provides the following key highlights:
- The value of IIP’s investments was £168.7 million as at 31 March 2022 (£263.1 million as at 30 September 2021; £259.2 million as at 31 March 2021).
- Net liabilities were £46.8 million as at 31 March 2022 (against net assets of £72.1 million as at 30 September 2021; £93.3 million as at 31 March 2021).
- Net liabilities indicate a value per share of 0p as at 31 March 2022 (net asset value per share of 10p as at September 2021; 13.7p as at March 2021).
- The net liability position is based on agreed preliminary terms with a third party and the ascribed net minimum consideration for IIP’s largest holding, Distribution Logistics Infrastructure Limited (“DLI”). The proposed transaction is structured in two parts, with a deferred consideration, which the Directors expect to have a positive impact on net assets in due course. The Board will be making further announcements as and when appropriate.
- The Board has been active in securing sources of financing to ensure the Group has adequate funding to continue to meet liabilities as they fall due and, as announced, this includes asset sales. As a result of this process, the Group has prepared the accounts on a basis other than going concern due to the uncertainty in relation to transaction timing, ultimate receipt of sale proceeds and the specifics of any deferred consideration. This basis was considered the most appropriate method for the reporting period and this was agreed with its auditors.